Nonprofit Mergers Around the Nation: Are They Really a Trend?

August 2, 2011; Source: The Free Press | The United Way operations in Mankato and St. Peter are merging. The head of the Greater Mankato Area United Way explained, “Mergers are a nationwide trend. Nonprofits are operating on shoestring budgets and this will help save costs.” Although United Ways are rarely living off of shoestrings, is it true that a merger trend is actually trending? There have been a bunch of recent merger announcements in the press recently:

  • Two Northeast Ohio organizations that provide computer support to local school systems are merging to become the “largest information technology center in Ohio,” serving 200,000 K–12 students, teachers, and administrators. The subtext of the news item is that the combined organizations can translate their school support skills into providing technological services for local governments and businesses.
  • In Rhode Island, two venerable home health care providers —Home & Hospice Care of Rhode Island, the nation’s second hospice ever (founded in 1976) and the Visiting Nurse Service of Greater Rhode Island (which dates back to 1908)—are creating a joint parent company, even though HHC and VNS will continue to operate under their own names. The rationale here seems to be related to impending national health care insurance changes. According to the Providence Journal, “By joining together, they expect to be better able to adapt to changes in reimbursement policies and the federal health-care overhaul.”
  • In Sacramento, two homeless youth organizations—Diogenes Youth Services and Wind Youth Services—are combining to operate as Wind Youth Services, to offer enhanced services through a streamlined operation, but also to save on administrative costs, such as by having one executive director instead of two.
  • Two human services organizations in Portland, Maine, are merging, but their concerns are about dealing with the still-troubled economy. People’s Regional Opportunity Program and Youth Alternatives Ingraham will start a yearlong merger process in October. YI is a mental health services provider, while PROP largely operates federally funded programs such as Head Start, fuel assistance, and WIC, and both are concerned about the flow of state and federal funds going forward.

Trend?  It is hard to say. But the diversity of reasons—from saving money to grabbing new business opportunities—suggests that nonprofit mergers are not a one-size-fits-all dynamic affecting only troubled shoestring agencies.—Rick Cohen